EUROPEAN UNION: Adoption of a Delegated Regulation on Central Clearing for Interest Rate Derivatives

Monday June 13 2016

The European Commission today adopted a new set of rules that require certain over-the-counter (OTC) interest rate derivative contracts denominated in specific European currencies, being the Norwegian Krone (NOK), Polish Zloty (PLN) and Swedish Krona (SEK), to be cleared through central counterparties (CCPs).

This follows commitments made by world leaders at the G-20 Pittsburgh Summit in 2009 to improve transparency and mitigate risks.

Today’s decision takes the form of a Delegated Regulation and implements the clearing obligation under the European Market Infrastructure Regulation (‘EMIR’). This constitutes the third set of classes to be subject to the clearing obligation, following the adoption on 6 August 2015 of rules subjecting some classes of interest rate derivative contracts to the clearing obligation and the adoption on 1 March 2016 of rules subjecting some classes of credit default swaps to the clearing obligation. The clearing obligations will enter into force subject to scrutiny by the European Parliament and the Council of the EU and will be phased in over three years to allow additional time for smaller market participants to comply.

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